ERF 222 Law of Succession Chapter 7 PDF

ERF 222 : LAW OF SUCCESSION CHAPTER SEVEN : CAPACITY TO INHERIT General Rule : All juristic or natural persons, born or unborn, are competent to inherit either testate or intestate regardless of their legal capacity, upon an estate falling into delatio. Natu...

ERF 222 : LAW OF SUCCESSION CHAPTER SEVEN : CAPACITY TO INHERIT General Rule : All juristic or natural persons, born or unborn, are competent to inherit either testate or intestate regardless of their legal capacity, upon an estate falling into delatio. Natural Persons A natural person regardless of age, mental condition, or legal capacity has the capacity to inherit and every natural person is capable of acquiring a vested right to an inheritance. A natural person may acquire the vested right to an inheritance, but may not have the immediate right to enjoy it. Major beneficiaries of sound mind with legal standing 1. A natural person must have attained the age of majority to enjoy their vested right to inherit. 2. A natural person must be of sound mind. 3. A natural person must not repudiate the inheritance. A natural person meeting such requirements acquires a vested right to an unconditional inheritance as well as the ability to enjoy that inheritance without restrictions. Minor beneficiaries 1. A natural person who is a minor may inherit, however, their ability of enjoyment is limited on account of their minority. 2. The Court supervises the administration of a minor’s inheritance through his or her legal guardian or a court-appointed curator if no guardian is available. Movable Property : If a minor inherits movable property they acquire a vested right upon the death of the testator, if the minor subsequently dies, the property forms part of the minor’s estate unless the contrary is stipulated in a will, and any movable property is managed by the minor’s guardian for his or her benefit. Inheriting Money : All money inherited by a minor is deposited in the Guardian’s Fund administered by the Master of the High Court and can be withdrawn by the guardian for maintenance, and the Master cannot disburse over R250,000 from the Guardian’s Fund without approval from the Court. Immovable Property : Immovable property inherited by a minor is registered in the minor’s name immediately, however, the minor may not sell, pledge, or mortgage the property. The minor's guardian, tutor, or curator administers the immovable property until the minor reaches adulthood.  1. A tutor is appointed in a will by a parent to act as guardian if the parent is unavailable. 2. To alienate or mortgage immovable property, the guardian or tutor must obtain the Master’s consent if the value is below R250,000 or High Court approval if it exceeds this amount. 3. The Master may approve mortgages for up to R250,000 if necessary for property preservation, maintenance, or education of the minor. 4. For alienation, the Master or High Court must be satisfied that it is in the minor’s interest. Nasciturus Fiction : The child must have been conceived at the time the inheritance is passed, the inheritance must benefit the unborn child, and the child must be born alive, even if just for a moment, however, if stillborn, the child cannot inherit. In terms of intestate succession, if the child is conceived at the time of the deceased’s death and is born alive, they inherit like any other heir. Section 2D(1)(c) of the Wills Act : A benefit allocated to a person’s children or class members vest in those alive at the time of the inheritance or conceived and later born alive. - The nasciturus fiction applies unless there is a clear contrary intention in the will. - In testamentary succession, benefits may be conditional or unconditional, and the fiction applies to children conceived at the time of inheritance and later born alive. - A nasciturus inheriting through either testate or intestate succession is treated similarly to a minor beneficiary. Common Law and Extramarital Children : Children born of incestuous, adulterous, or extramarital relationships could only inherit under specific circumstances. Section 2D(1)(b) of the Wills Act and Section 1(2) of the Intestate Succession Act gives children born of extramarital relationships the same status as those born within wedlock in both testate and intestate succession. Persons of Unsound Mind 1. In the law of succession, a person of unsound mind can inherit, but restrictions may apply to the enjoyment of the inheritance. 2. If a beneficiary is declared of unsound mind, a court appointed curator will administer the inheritance on their behalf, similar to how a minor’s property is managed. Court Order : Without a court order, the beneficiary is treated as a person of sound mind, the applicant must prove that the beneficiary cannot sensibly manage the property when applying to the court. A prodigal (spendthrift) is not considered of unsound mind, but their ability to handle their estate is restricted and requires a court-appointed curator. Insolvents General Rule : An insolvent person retains the ability to inherit, however, any property they own becomes part of the insolvent estate and the property must be administered by a trustee for the benefit of creditors. In most cases, the property will need to be sold, and proceeds will be distributed to creditors based on the Insolvency Act’s order of preference. As part of estate planning, a testator can include a clause in the will stating that if any heir is insolvent, the inheritance may be forfeited and the inheritance can then be directed to a substitute heir or placed in a trust. Juristic Persons General Rule : Juristic persons can inherit intestate under the Intestate Succession Act, as the act does not prevent a testator from nominating a company or close corporation as a beneficiary which can inherit unless an authorised director or member repudiates the inheritance. Repudiation : Repudiation must occur within a reasonable time after the company gains the capacity to inherit, however, if a company or close corporation is insolvent or under judicial management, it is unclear whether directors or members can repudiate the inheritance. Repudiating to the detriment of creditors may breach the fiduciary duties of directors or members. Entities other than Companies and Close Corporations Trusts, Voluntary associations, Syndicates, Firms and Partnerships may be nominated as beneficiaries in a will, and may repudiate an inheritance through agents, however, entities without corporate personalities may allow individuals behind them to repudiate an inheritance by a majority vote or special resolution. Wessels v De Jaeger : There is debate regarding the conflict between the Wessels case and previous law that suggests a beneficiary’s right to claim a bequest vests at delatio (dies cedit), however, the vesting of this right should not be postponed until the beneficiary formally accepts through adiation. Disqualified Persons Bloody Hand Rule : A person is prohibited from inheriting from their own wrongdoing or misdeeds. Coniunctissimi : Surviving spouses, parents and children of the deceased testator, singular Coniunctissimus. Beneficiaries responsible for the death of the deceased or their coniunctissimi are disqualified from inheriting as well as a beneficiary who assisted in causing such a death, whether negligently or intentionally. Roman-Dutch Maxim : “De bloedige hand neemt geen erf”, which encapsulates the entire bloody hand principle, which the Courts are reluctant to relax without legislative intervention. Disqualification is not immediate, as a court order is required to disqualify the beneficiary in terms of the Bloody Hand Principle. Casey v The Master : The onus of proof lies with the party alleging disqualification, as a criminal conviction is not a prerequisite for disqualification and evidence must be presented in civil matters, however, legal and factual causation issues arise when determining disqualification, as shown in various case scenarios. Ex parte Steenkamp : Court was hesitant to expand the definition of coniunctissimi.  a. Casey v The Master : The act of murder disqualifies a beneficiary from receiving an inheritance, and the Court reaffirmed that a beneficiary who intentionally kills the deceased cannot inherit from the estate. b. Caldwell v Erasmus : Assisting in the murder of the deceased disqualifies a beneficiary from inheriting. c. Ex parte Steenkamp and Steenkamp : Clarified that a murderer cannot inherit from the estate of the deceased they killed, even if they were not the direct cause of death. d. Leeb v Leeb : Established that the will can specify disqualification for inheritance due to misconduct, which must be clearly stated. e. Danielz v De Wet : Discussed the implications of criminal behaviour on inheritance rights. f. Makhanya v Minister of Finance : Related to statutory disqualification for persons involved in the death of the deceased. g. Nell v Nell : Explored the consequences of beneficiary misconduct on their right to inherit. h. Ex parte Vonzel : Confirmed that a person convicted of murder cannot inherit from the estate of their victim. i. Smit v The Master : Discussed the legality and consequences of inheritance in cases where a beneficiary is implicated in the death of the deceased. Unworthy Persons Indignus : A person who unlawfully causes the death of a deceased or their close relatives, rendering them unworthy of inheriting and is anyone lacking merit, not just those who kill, and is influenced by public policy and an indignus is a beneficiary barred from inheritance due to unworthy conduct. L Taylor v AE Pim : The deceased was deemed to have lacked testamentary capacity due to excessive alcohol consumption and alleged coercion by Pim. The court found Insufficient evidence of undue influence or lack of sound mind at the will’s execution, however, it concluded that Pim was an indignus due to his role in Rebecca’s moral decline. Danielz v De Wet : The court expanded the indignus principle to include beneficiaries involved in the death of the deceased, emphasising that no one should benefit from their wrongful actions. Pillay v Nagan : A son forged his mother’s will, leading to his disqualification from inheriting due to fraudulent conduct. 1. The indignus principle is recognized in South African law and aligned with public policy. 2. Courts can disqualify a beneficiary based on public policy even if common law is silent on specific acts. 3. An indignus is disqualified from inheriting under both testate and intestate succession. Persons involved in the Execution Process Section 4A of the Wills Act : Disqualifies beneficiaries involved in the execution of a will from benefiting. 1. Disqualification applies to those who witness, write, or are spouses of witnesses at the will’s execution. 2. A beneficiary who types a dictated will is not disqualified. Section 4A(2) outlines exceptions to disqualification based on inheritance amounts. - If a disqualified beneficiary’s inheritance is less than what they would receive intestate, disqualification is lifted without court involvement. - The presence of two competent witnesses who do not inherit allows for the disregard of disqualification. - If neither exception applies, a court application is needed to prove the beneficiary did not unduly influence the testator. - Section 4A(2) only applies to validly executed wills; invalid wills require court condonation. - The Master can determine disqualification under certain conditions; otherwise, the High Court must be approached. Consequences of Disqualification Common Law : A disqualified beneficiary’s descendants were also disqualified from inheriting. Section 2C of the Wills Act : The legislature amended this position to prevent unfair consequences for the children as it and Section 1(7) of the Intestate Succession Act provide for substitution ex lege. Customary Law of Succession The Wills Act and the Intestate Succession Act apply to estates of individuals living under customary law and the principles regarding the capacity of beneficiaries to inherit are applicable, however, unofficial customary law (living law) may still influence a beneficiary’s capacity to inherit.